Communicating Frames in Negotiations

by Kathleen L. McGinn and Markus Nöth

Executive Summary —
Economists examining bargaining behavior and outcomes often disregard the complex role of communication, restrict interaction to offers and counteroffers, or study the mere presence of communication while ignoring or constraining its content. This paper asks: How and why does talk sometimes make bargaining more cooperative and other times make bargaining more competitive? The answer may depend on examining what is being communicated about the underlying purpose of the interaction. Kathleen L. McGinn and Markus Noth argue that the content of communication frames the bargaining situation and thus can help predict bargaining behavior and final agreements. Key concepts include:

Notions about the nature of the interaction form the basis for bargaining behavior and the final terms of agreement or disagreement.

Communication sets certain behavior in motion by signaling the fundamental nature of the interaction, i.e., the right thing to do.

Communication shapes the shared understanding of the negotiation and this, in turn, shapes the admissible arguments and strategies.